Save the UK buy to let market

We are appealing to landlords and tenants alike to sign our e-petition to save our Buy to Let market & the private rental sector.

The reason for this is that the EU want to regulate the buy to let mortgage market under the same European rules as the residential market, i.e. banks will no longer be able to lend based on the property's rental income, but only lend purely based on the applicants declared annual income, this will effectively kill off the buy to let market as we know it and bring a huge shortage of quality houses for tenants to rent and be a economic disaster for the UK.

Please show your support in saving the UK buy to let market by clicking on the following link:    http://epetitions.direct.gov.uk/petitions/22767

The property industry generates more income for the UK than the banking industry, the demand for buy to let lending is increasing, if the EU get their way and we don’t stand our ground, by 2013 the buy to let market will be dead.

Show your support by clicking the following link:    http://epetitions.direct.gov.uk/petitions/22767

For full details on the proposed changes, read below:

Concerns are mounting over the growing likelihood of EU regulation of buy-to-let mortgages in the UK, with some landlords being urged to remortgage long-term sooner rather than later to avoid possible difficulties later.

There are fears that regulation could restrict mortgage availability and force landlords who are unable to remortgage to sell up, with falling house prices and fewer properties to rent among the results.

According to new analysis by the Building Societies Association, EU intervention could prove disastrous.

Some 1.4m landlords with buy-to-let loans are set to be affected by the proposed changes, and some might find they no longer qualify for a remortgage in as little as two years’ time.

The new EU legislation, being brought in to deter ‘irresponsible lending’, is due to be voted on early in the new year and to come into effect in 2013.

At its heart, the EU draft Directive on Credit Agreements Relating to Residential Property says says buy-to-let mortgages should be regulated in the same way as residential mortgages.

This would prevent lenders from taking anticipated rental income into account when deciding the amount of the loan.

The EU proposals, which would bring Britain into line with Continental practice, would force lender to assess buy-to-let borrowers in the same way as mortgage applications by owner occupiers – ie, on earnings and the size of their deposit.

Currently, rental income is treated as unearned income, so would not count in calculations. 

Paul Broadhead, head of mortgage policy at BSA, said: “If rental income is excluded from consideration when underwriting BTL, then the availability of new borrowing could cease fairly rapidly. In addition, those with existing buy-to-let loans may well be unable to refinance.

“Over time this could lead to a reduction in private rented sector properties. At the extreme, current BTL borrowers may be forced to sell their property portfolios, which would have obvious implications for existing tenants and the housing market as a whole.”

Landlord bodies, such as the Residential Landlords Association, have consistently criticised EU attempts to regulate the buy-to-let mortgage sector, saying that it is inappropriate, given that landlords are essentially business people, making business decisions.

Regulation of buy-to-let loans would bring the sector under the remit of the FSA and its successor, thus giving buy-to-let borrowers consumer-style protection in the event, for example, of mis-selling.

The FSA appears to be ready to welcome this.

At the recent CML conference, Sheila Nicoll, director of conduct policy at the FSA, told delegates that it is for the Government to decide whether buy-to-let should be regulated. But she added: “We certainly see benefit in having the buy-to-let market regulated alongside the residential mortgage market.”